Source: Automotive News email alert.
SEOUL -- Kia Motors Corp., Korea's No. 2 automaker, is considering plans to build an auto plant in the southeastern United States.
The plans became public Monday when Kia CEO Chung Mong Koo received a visit from Mississippi Gov. Haley Barbour at the company's offices in Seoul.
Hyundai Motor Co., which owns a controlling interest in Kia, disclosed that Chung and Barbour discussed Mississippi's desire to be the site for a Kia plant. Barbour, who is leading a trade mission to Asia, also talked about incentives to attract the plant, Korean newspapers reported.
Hyundai distributed a photo of Barbour sitting at the wheel of a Kia Grand Carnival minivan, while Chung explained the vehicle to him.
In a statement, Hyundai said one benefit of locating in Mississippi would be that the plant would be only two or three hours drive from 11 Korean suppliers that had located near Hyundai's own new plant at Montgomery, Ala.
Hyundai opened that plant in May. The $1.1 billion plant has a capacity to build 300,000 Sonata sedans and Santa Fe SUVs annually.
No decision has been made about a Kia plant, and Kia is still evaluating the market. But it's possible a decision could be made within this year, a Hyundai official said.
"We're approaching that volume threshold where a plant would be justified for Kia," he said.
The investment is warranted when sales are around 400,000 units a year, he said.
"Kia is fast approaching that threshold. It will reach it within a couple of years. Do the math," he said.
Kia sold 270,055 vehicles in the U.S. in 2004. It's targeting sales of 299,000 units in 2005, for a gain of 10.7 percent.
U.S. sales during the first seven months of this year totaled 169,138 units, up 6 percent.
Hyundai broke ground for its Montgomery plant in April 2002 after selling 346,000 vehicles in the U.S. in 2001. The plant took three years to build. Hyundai's U.S. sales last year - before the plant opened - were 418,615 units.
The Hyundai official said site selection for the Kia plant is still at a preliminary stage. Kia is examining candidate states and looking at the various packages of incentives that different locations offer, he said.
The company has been researching sites for several months and has considered sites as far apart as Georgia, West Virginia, Mississippi and Texas. "From West Virginia to Texas, there's a broad horizon of possible locations," he said.